Equal-Weight Russell 1000 ETF Continues Shining

The methodology that backs EQAL’s underlying index also mandates that the share portion of a potential constituent in a notional $5 billion portfolio cannot exceed 5% of the company’s float, ensures liquidity and that the benchmark remains investable.

The Russell 1000 Equal Weight Index’s overweights to energy and healthcare names have helped drive EQAL’s out-performance of IWB. That index currently allocates 22.5% of its combined weight to healthcare and energy stocks while the cap-weighted Russell 1000 index allocates just 10.2% to those sectors, according to Russell data.

Likewise, EQAL is underweight financial services names, which have been laggards this year. That sector commands a still solid 10% of EQAL’s weight, but it accounts for 17% of IWB’s lineup.

Table Courtesy: Russell Investments